Google will soon be required to withhold taxes on YouTube earnings generated from viewers in the United States.
This change is going into effect as early as June. How much tax is withheld from YouTube creators depends on a few factors.
If you live outside the United States and have a revenue-earning YouTube channel with a US-based audience, this applies to you.
Here’s everything we know about the situation so far.
If you’re a YouTube creator outside of the United States you may begin to have taxes deducted from your US earnings later this year.
Google says it has a responsibility under Chapter 3 of the US Internal Revenue Code to collect tax information from all monetizing creators outside of the United States.
In certain circumstances, Google will also be required to deduct taxes when YouTube creators’ earnings come from viewers in the United States.
YouTube creators can be taxed on US earnings from ad views, YouTube Premium, Super Chat, Super Stickers, and channel memberships.
Over the next few weeks, YouTube creators outside the United States will be asked to submit their tax information in AdSense.
Here’s how to find that information:
From there creators will be asked a series of questions to determine the appropriate tax form to fill out. This form will be available in the creator’s selected AdSense language.
Channels that partner with a multichannel network (MCN) will still need to provide US tax information in the AdSense account linked to their channel. If any taxes apply they will be deducted from the payment made to the MCN.
Google is asking YouTube creators to submit relevant tax information in AdSense by May 31, 2021.
Tax information is required in order for Google to determine the correct amount of taxes to deduct, if any apply.
Google will start deducing taxes on US earnings as early as June. Taxes will be deducted from with each monthly payment.
How much YouTube creators will be taxed depends on a few things:
It’s possible that a non-US YouTube creator will not be taxed by Google if none of their viewers live in the United States.
Here’s to calculate US earnings from YouTube:
There you can see how much revenue is subject to US taxes.
If a creator’s tax information isn’t provided by May 31, Google may be required to apply the default withholding rate of up to 24% of their total earnings worldwide.
Without providing tax information Google will be required to assume the creator is a resident of the United States and will tax all their earnings. Not just revenue earned from US viewers.
That’s a situation YouTube creators are going to want to avoid, so it’s best to get that tax information submitted sooner than later.